OLVAS.HE WACC - Weighted Average Cost of Capital

The WACC of Olvi Oyj (OLVAS.HE) is 6.7%.

The Cost of Equity of Olvi Oyj (OLVAS.HE) is 6.80%.

The Cost of Debt of Olvi Oyj (OLVAS.HE) is 6.55%.

	Range	Selected
Cost of equity	5.80% - 7.80%	6.80%
Tax rate	23.00% - 26.00%	24.50%
Cost of debt	4.00% - 9.10%	6.55%
WACC	5.6% - 7.8%	6.7%

WACC

OLVAS.HE WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.7%	6.7%
Adjusted beta	0.53	0.61

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.80%	7.80%

Tax rate	23.00%	26.00%
Debt/Equity ratio	0.06	0.06
Cost of debt	4.00%	9.10%

After-tax WACC	5.6%	7.8%


Selected WACC	6.7%

OLVAS.HE's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for OLVAS.HE:

cost_of_equity (6.80%) = risk_free_rate (2.95%) + equity_risk_premium (6.20%) * adjusted_beta (0.53) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.